Sega making Dreamcast 2?

Source: Trademark-trolling site Trademork reported this week that Sega had filed a new application to secure its rights to the Dreamcast name. The site speculated that the game maker might be preparing to reenter the hardware market with a Dreamcast 2. A slew of Web sites jumped on the speculation...

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Source: Trademark-trolling site Trademork reported this week that Sega had filed a new application to secure its rights to the Dreamcast name. The site speculated that the game maker might be preparing to reenter the hardware market with a Dreamcast 2. A slew of Web sites jumped on the speculation and passed it along with a token dash of skepticism.

What we heard: The Sega Dreamcast launched in the US on September 9, 1999. Despite boasting a library of highly regarded games including Soul Calibur, NFL 2K, and Jet Grind Radio, the system struggled to gain a foothold in the market. Less than a year and a half after the system's launch--and only a couple of months after Sony released the PlayStation 2--Sega officially gave up on the Dreamcast and game hardware altogether in January of 2001.

Peter Moore, then-president and CEO of Sega of America, explained the company's withdrawal bluntly. "With the hardware game becoming increasingly competitive--especially for companies like Sega, whose pockets are not as deep as our competitors--we've chosen to place our bets on our software, our heritage, and our proven track record," Moore said at the time.

Those who follow the industry, or at least haven't been living in a cave for the last couple of years, will recognize that the industry landscape that Moore described is largely unchanged. If anything, it's more competitive, and Sega's pockets haven't gotten substantially deeper. They certainly aren't deep enough to afford buying themselves back into the hardware game. Microsoft has invested billions getting the Xbox off the ground and is only now starting to see potentially sustainable profits from the division, seven years, three Halos, and two systems later.

There's also the issue of what Sega could bring to the table to steal any substantial market share from Microsoft, Nintendo, and Sony. The company's biggest asset would be the array of familiar franchises and brands it has, such as Sonic the Hedgehog and Virtua Fighter. Seven years ago, that same strength proved inadequate when the Dreamcast failed to compete with even the specter of the PlayStation 2's approaching launch.

The industry is larger than ever, and the stakes in the hardware market are accordingly high. Sega folded years ago, figuringthat it'sbetter to be a heavy hitter in the third-party publisher world than a straggler in the hardware game. There's no reason to think the company would get back into the game now.

The official story: "Although I think all gamers would like to see a new Dreamcast (including myself), this looks to be more wishful thinking in the rumor mill."--A Sega representative.